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Vietnam: Formosa increases HRC prices by $30/t m-o-m as import offers edge higher

Vietnamese steel major Formosa Ha Tinh has increased HRC prices by $30/t for March and early-April, 2023 sales. After the revision, prices of HRC (SAE1006, skin pass) sta...

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BigMint Bureau

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9 Jan 2023, 15:17 IST

Vietnam: Formosa increases HRC prices by $30/t m-o-m as import offers edge higher

Vietnamese steel major Formosa Ha Tinh has increased HRC prices by $30/t for March and early-April, 2023 sales. After the revision, prices of HRC (SAE1006, skin pass) stands at $640/t CIF Ho Chi Minh City, while non-skin pass coils are assessed at $635/t CIF, sources informed. Meanwhile, imported HRC offers have increased this week.

Current imported HRC offers:

- China: A few Chinese mills are offering HRC (SAE1006) at $625-635/t CFR Vietnam for March shipments. Offers for HRC (SS400) were $615-620/t CFR a week back. With the majority of mills being overbooked, there are few offers in the market now.
- India: There are no firm offers from Indian mills and they are waiting it out in expectation of further increases. Last heard indication were around $625-630/t CFR for February shipments, towards the end of December 2022.
- Taiwan: Offers from Taiwan were heard at $650/t CFR.
- Japanese and South Korean mills have stopped offering amid the Lunar New Year in China and Tet holidays in Vietnam, and are likely to come up with higher offers after the holidays.
- No offers were heard from Russia.

Vietnam: Formosa increases HRC prices by $30/t m-o-m as import offers edge higher

Factors influencing HRC market

1. Chinese mills booked for March sales: Most Chinese steel mills have used up their March export allocations ahead of the Lunar New Year festival (21-27 January), sources informed. Only a few mills have allocations while most other mills are now offering for April shipments. On a monthly basis, Chinese HRC offers for Vietnam have risen by $20/t. Chinese SHFE HRC futures (May 2023 contracts) have also increased by RMB 68/t to RMB 4,167 as assessed on 7 January against RMB 4,099 on 3 January.
Vietnam: Formosa increases HRC prices by $30/t m-o-m as import offers edge higher

2. Sales improve, Vietnamese mills to increase output: The Vietnamese steel market which witnessed a lull in the September-October period, showed improvement in sales volumes in December. Hoa Phat reported sales of 558,000 t of construction steel in December, higher than volumes in the three preceeding months.

Meanwhile, Hoa Phat was heard to have reignited one of its five blast furnaces on 27 December which had been shut down in November and December.
Vietnam: Formosa increases HRC prices by $30/t m-o-m as import offers edge higher

3. Export demand to improve: Demand from Europe is likely to improve as buyers are looking to replenish their depleted stocks, sources in Vietnam informed. Thus, Vietnamese mills are looking at improving their production levels to cater to both the domestic and overseas markets.

Near-term outlook
It is likely that imported HRC offers will increase post the Tet holidays which coincide with the Chinese Lunar New Year festival. Also, Hoa Phat is likely to come up with revised offers in the coming days.